I've been writing about political economy and foreign affairs since 2008, first from Forbes' New York offices, then as a freelancer with the Pulitzer Center on Crisis Reporting in South Asia, and now as a freelancer back in New York. I focus on the way economic forces--poverty, development, energy, natural resources, corruption, crime--shape national and international politics. What excites me is the possibility that an economic approach, by shedding new light on old problems, can point us to innovative solutions.

It Takes Courage: Christine Lagarde takes charge of a troubled IMF

Lagarde was able to exercise more autonomy on the international stage, where she leveraged the global experience of her Baker years to act as a mediator during the European debt crisis. “Her role throughout,” says Bonnard, “was to sit in the middle and make overtures to [U.S. Treasury Secretary Timothy] Geithner.” In May 2010 a three-day summit to broker a loan program for Greece slammed into German opposition to taxpayer-funded bailouts. While other leaders chastised German callousness, Lagarde listened to their objections, then left the room. She pulled out her iPhone and conference-called Washington and Tokyo, reported what she had gleaned of Germany’s position and took suggestions from her G7 counterparts back to the meeting. That back-and-forth produced a compromise: bilateral loans from EU countries, IMF assistance and a strict austerity program.

A year later—with a second package for Greece recently approved, similar loans-for-cuts deals in placein Ireland and Portugal and concern that Italy and Spain could be tumbling next—Lagarde’s performance as a transatlantic liaison was the chief driver of her appointment to the top job at the IMF.

And what a mess it is at the Fund—first rocked by scandal, then kicked by the euro crisis. The Rabelaisian Strauss-Kahn left a demoralized institution of 2,500 economists, policy advisors and the like. His sudden resignation, precipitated by charges of assault by a hotel maid, has brought renewed scrutiny of his 2008 affair with an IMF subordinate—and of the culture at the Fund, which some female employees described as no better than a frat house. Interviewing for her job, Lagarde recalls, “it was a board of 24 men. And that is a message about diversity; it has nothing to do with the Fund itself. Over 45% of the staff is female. But as is often the case, the higher you go in the hierarchy the fewer women there are.” While she may be able to shift the gender ballast at the Washington, D.C.-based organization, “I’m not going to be able to change U.S. society by myself.”

Lagarde is no Betty Friedan feminist. At Baker she was chairman, not chairwoman. When tapped to lead the trade ministry, she called her mom. “I said, ‘Do you think I should turn [my title] into the feminine version of it?’ And she said, ‘Absolutely not. Change the way management is conducted. That’s fine for you, my girl.’” Le Ministre it was.

Perhaps more pressing is the IMF’s longstanding problem of legitimacy, a predicament made worse by Strauss-Kahn’s chaotic departure. The Fund has long been vilified by the developing world for loan programs that spurred economic growth while increasing inequality and fueling political unrest. But globalization has created economic powerhouses out of countries that once begged from the Fund’s bowl. That’s made it increasingly difficult for Western countries, which control the IMF’s board and its senior staff roles, to dictate policy to less-developed states. The DSK affair has only stoked these flames.

Turning the scorched page of the recent past isn’t easy. Strauss-Kahn did reform the IMF. He pushed for a human approach to economics, emphasizing jobs and social indicators as much as inflation targets. He fired economists with traditional approaches and brought on those with more diverse backgrounds and expertise, who were more pragmatic than ideological. He encouraged borrower nations to pursue fiscal expansion and stricter regulation. And he promised to give large emerging markets—like India and China—a bigger say on the Fund’s board.

Lagarde won’t undo everything. She will finish internationalizing the board. She stands behind the human approach to economic research. “It’s not because you are a free marketer that you are not concerned for the most underprivileged people,” she says. She seconds the call for less conventional economists and research teams.

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